Buyer Due Diligence

Buyer Due Diligence

Doing your due diligence on the front end can help avoid oversight and costly mistakes.

1. Look at annual and quarterly financial information
2. Review sales and gross profits
3. Check the rate of return by product
4. Look at the accounts receivable
5. Business inventory breakdown
6. Summary of debt and terms
7. Review a copy of the lease
8. Review Articles of Incorporation
9. Trademarks, trade secrets, 
10. Marketing & demographics

These steps taken by a potential buyer in order to satisfy personal and legal requirements, especially in buying or selling a business, will prevent any unforeseen errors.  The buyer should perform a comprehensive appraisal of the business. This will establish its assets, liabilities and evaluate its commercial potential.